719 F.2d 207 (7th Cir. 1983), 81-1331, Wilk v. American Medical Ass'n

Docket Nº:81-1331.
Citation:719 F.2d 207
Party Name:Chester A. WILK, D.C.; James W. Bryden, D.C.; Patricia A. Arthur, D.C.; Steven G. Lumsden, D.C.; and Michael D. Pedigo, D.C., Plaintiffs-Appellants, v. AMERICAN MEDICAL ASSOCIATION, American Hospital Association, American College of Surgeons, American College of Physicians, Joint Commission on Accreditation of Hospitals, American College of Radiolo
Case Date:September 19, 1983
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit
 
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719 F.2d 207 (7th Cir. 1983)

Chester A. WILK, D.C.; James W. Bryden, D.C.; Patricia A.

Arthur, D.C.; Steven G. Lumsden, D.C.; and

Michael D. Pedigo, D.C., Plaintiffs-Appellants,

v.

AMERICAN MEDICAL ASSOCIATION, American Hospital Association,

American College of Surgeons, American College of

Physicians, Joint Commission on Accreditation of Hospitals,

American College of Radiology, American Academy of

Orthopaedic Surgeons, Illinois State Medical Society, H.

Doyl Taylor, Joseph A. Sabatier, M.D., H. Thomas Ballantine,

M.D., James H. Sammons, M.D., Defendants-Appellees.

No. 81-1331.

United States Court of Appeals, Seventh Circuit

September 19, 1983

        Argued Jan. 20, 1982.

        As Amended Oct. 3, 1983.

        Rehearing and Rehearing En Banc Denied Dec. 1, 1983.

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        George P. McAndrews, Allegretti, Newitt, Witcoff & McAndrews, Chicago, Ill., for plaintiffs-appellants.

        Phil C. Neal, Friedman & Koven, Max E. Wildman, Chicago, Ill., for defendants-appellees.

        Dennis C. Waldon, W. Thomas Huyck, Roan & Grossman, Jay H. Hedgepeth, Chicago, Ill., for, American Hospital Association.

        Before SWYGERT, Senior Circuit Judge, SPRECHER, [*] Circuit Judge, and DOYLE, Senior District Judge. [**]

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        JAMES E. DOYLE, Senior District Judge.

        Plaintiffs appeal from a judgment entered on a jury verdict in favor of defendants-appellees. Plaintiffs, five licensed chiropractors, charged defendants-appellees 1 with violating sections 1 and 2 of the Sherman Act, 15 U.S.C. Secs. 1 and 2 (1979). 2 Plaintiffs alleged that defendants engaged in a combination and conspiracy to eliminate the chiropractic profession through refusing to deal with plaintiffs and other chiropractors. Plaintiffs alleged defendants implemented the group boycott by agreeing to induce individual medical doctors to forego any form of professional, research, or educational association with chiropractors, to induce hospital and other health care facilities to deny access to chiropractors, and to induce actual and prospective patients of chiropractors to avoid seeking chiropractic services. Plaintiffs also alleged that through this agreement, defendants attempted to monopolize and conspired to monopolize certain health care markets. 3

       I. GROUNDS OF APPEAL

        Plaintiffs' principal ground of appeal is that the court's instructions gave the jury to understand, incorrectly, that a boycott by defendants, resulting in a diminution of competition between chiropractors and medical doctors, was lawful if the boycott was the product of a genuine belief by medical doctors that chiropractic is dangerous quackery. Because the district court embraced this incorrect view of the law, plaintiffs contend, it received in evidence, erroneously and over objection, much prejudicial material concerning the alleged evils of chiropractic. Plaintiffs contend also that the jury was incorrectly instructed on the application of the first amendment in the circumstances.

        The remaining grounds of appeal relate to: jury instructions on coercive enforcement of ethical canons as an essential element of a conspiracy of the type alleged; jury instructions relating to apparent authority of agents; the trial court's handling of the "unclean hands" concept; and the trial court's refusal to permit reopened discovery into settlement negotiations.

        Defendants-appellees dispute all of these contentions, of course. Five of the organization defendants (JCAH, AHA, ACP, ACS, and ISMS) raise a further argument. Each claims that its motion for a directed verdict was erroneously denied by the district court. Each asserts that the evidence was insufficient to support a jury finding that it was a member of a conspiracy. Thus, each contends, the judgment they won should be affirmed even if the judgment in favor of the other defendants were to be reversed on one ground or another.

        In the following section headed "Facts," we set forth those propositions which a reasonable jury might have found as fact and which might arguably have prompted a verdict in plaintiffs' favor, had the jury been instructed as plaintiffs contend it should have been and had the jury been

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protected from the allegedly prejudicial evidence. We set forth, also, those facts concerning the involvement of JCAH, AHA, ACP, ACS, and ISMS in the alleged conspiracy which a reasonable jury might have found from the evidence, viewed most favorably to the plaintiffs.

       II. FACTS

        The American Medical Association (AMA) is a nonprofit corporation with a membership of over 200,000 medical doctors, which is nearly half the total number of medical doctors in the United States. AMA is a federation of independent state and territorial medical societies, each of which appoints representatives to the House of Delegates of the national organization. The House of Delegates elects the AMA Board of Trustees. AMA is heavily involved in this country's professional and public medical education programs. AMA also publishes numerous professional journals, receives and responds to questions from the public on medical subjects, and engages in legislative lobbying. AMA promulgates the Principles of Medical Ethics, which are interpreted by its Judicial Council.

        The American Hospital Association (AHA) is a nonprofit corporation composed of 7,000 organization members and 30,000 individual members. Approximately 6,000 of the 7,000 hospitals in the United States belong to AHA. AHA publishes several periodicals and manuals on various topics related to hospital operations. It also collects statistics on hospitals, sponsors educational programs, and reviews and responds to governmental activities relevant to hospital operations.

        The American College of Surgeons (ACS) is a nonprofit corporation having as its members about 40,000 of the 100,000 American physicians who identify themselves as surgeons. ACS takes public positions on relevant issues and sometimes expresses those positions to legislative and administrative bodies.

        The American College of Physicians (ACP) is a nonprofit corporation composed mainly of physicians who specialize in internal medicine. Its chief function is to conduct continuing education programs for members and nonmembers.

        The Joint Committee on Accreditation of Hospitals (JCAH) is a nonprofit corporation having AMA, AHA, ACS, ACP, and the American Dental Association as its members. The member organizations appoint representatives to the JCAH Board of Commissioners, the policy-making body of JCAH. JCAH operates a health care facilities accreditation program, in which it establishes standards for accreditation and conducts surveys of individual institutions when they so request. If a facility meets JCAH standards, that facility is accredited.

        The American College of Radiology (ACR) is a nonprofit corporation with approximately 13,000 members, most of whom are medical doctors specializing in radiology. It is active in education and research, and it furnishes advice and information to government, private industry, and health care professionals concerning radiation protection and the practice of radiology.

        The American Academy of Orthopaedic Surgeons (AAOS) is a nonprofit corporation composed of about 9,000 medical doctors who specialize in orthopaedic surgery. More than 75 percent of the total number of board-certified orthopaedic surgeons in the United States belong to AAOS. AAOS conducts continuing medical education courses for practicing orthopaedic surgeons and persons working in related areas, including orthopaedic nursing, occupational therapy, physical therapy, and manufacturing braces and artificial limbs.

        The Illinois State Medical Society (ISMS) is a state medical society with approximately 14,000 medical doctors as members. ISMS is one of the fifty state medical societies that comprise AMA.

        Doyl Taylor was employed by AMA and served as director of the AMA Department of Investigation and as secretary to the AMA Committee on Quackery. Joseph A. Sabatier, Jr., M.D., and H. Thomas Ballantine, Jr., M.D., both served on the AMA

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Committee on Quackery as members and chairmen. James H. Sammons, M.D., was a member of the AMA Board of Trustees.

        Chiropractic is a health care service. Its primary therapeutic tool is spinal manipulation. 4 Chiropractors and medical doctors treat some of the same medical problems. Chiropractors would treat some patients in health care facilities and would use hospital X-ray and laboratory services if such treatment and use were permitted.

        In Illinois, Michigan, California, Colorado, and Missouri, five states where plaintiffs have practiced, there were no laws in effect during the time relevant to this lawsuit that prohibited chiropractors from furnishing care in a hospital under the supervision of a medical staff member, nor were there laws preventing hospitals from providing X-ray or laboratory services to chiropractors or preventing hospital X-ray departments or radiologists from making X-ray films or copies of X-rays available to chiropractors at the request of their patients.

        Principle 3 of the AMA Principles of Medical Ethics in effect during the alleged boycott provided: "A physician should practice a method of healing founded on a scientific basis; and he should not voluntarily professionally associate with anyone who violates this principle."

        At its meeting on November 2 and 3, 1963, the AMA Board of Trustees voted to establish a "Committee on Quackery" (Committee). The Committee was active from that time until 1974. It considered "its prime mission to be, first, the containment of chiropractic and ultimately, the elimination of...

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